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EDITORIAL: State budget malpractice

Times-Tribune (Scranton, PA)

Nov. 27--It was fitting in its way last week when a federal judge stalled the state government's effort to help fund the budget with $200 million from a fund for medical malpractice coverage. The budget itself, after all, is the result of legislative malpractice.

U.S. District Judge Christopher Conner of Harrisburg granted a request sought by the Pennsylvania Professional Liability Joint Underwriting Association to prevent the government from taking the $200 million from its reserve funds. The injunction will stand until he rules on the merits.

The association is a nonprofit created by state law in the 1970s to make medical malpractice insurance available to professionals who cannot obtain it in the private market.

Lawmakers first targeted the association's surplus last year but learned that the group's accounts were not state accounts. This year, lawmakers and the Wolf administration argued that the association is supposed to turn over its surplus, whereas the organization contends that doing so would contradict its stated purpose for existence, and that it is not a state agency.

The state government's position is ominous beyond the technical legal questions. If the government succeeds in securing the surplus for the state budget, it could open the door for its access to money held by any number of other state-related enterprises. For example, critics of the state's position say it could lead to pilfering endowments held by the University of Pittsburgh and Penn State University.

Regardless of the outcome, the controversy reflects bad state policy. The Legislature could fund the budget each year by reforming the obsolete tax structure, creating a modest tax on gas extraction and closing multiple loopholes that encourage tax evasion. Instead, it beats the bushes for one-time infusions of cash that exist to serve other valuable purposes.

The organizations that serve those valuable purposes should not have to beat away state legislators who lack the political will to make difficult budget decisions. Even if Conner eventually validates the state raid on the surplus, the Legislature should reverse course and fund the budget with reliable, recurring revenue.